After posting gains yesterday, shares of New Fortress Energy (NFE 0.97%) were getting hit hard in today's trading. The company's stock price was down 9.2% as of 3:40 p.m. ET on Wednesday.
New Fortress stock saw big gains on Tuesday after it was announced that the Trump administration had fired most of the board members of a federal watchdog group tasked with overseeing Puerto Rico's finances. Investors took yesterday's pop as an opportunity to sell the stock, but its share price is seeing big downward pressures today.
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New Fortress sinks as yesterday's momentum fades
The stock saw big gains yesterday after it was announced that the Trump administration had fired five of the seven members of an oversight board that had been tasked with monitoring and requesting action for the finances of Puerto Rico.
New Fortress had been in discussions with the Puerto Rican government on a 15-year natural gas contract worth roughly $20 billion, but the territory's negotiators walked away from contract talks after the company was unwilling to make concessions related to monopoly concerns that could result from the deal.
What's next for New Fortress?
New Fortress has a very high debt load and may need substantial new sources of revenue and cash flow to remain solvent. The potential natural gas deal with Puerto Rico was viewed as a major potential lifeline for the company, but the business' outlook seems much weaker now that negotiations on a possible long-term contract have ceased.
Shifts in regulatory and public-policy dynamics could pave the way for a deal eventually, but New Fortress Energy stock looks like a risky play right now.
